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The leading public sector lender Bank of Baroda (BoB) has hiked MCLR (marginal cost of funds based lending rate) by 10-20 bps across all tenors. The revised MCLR will take effect on June 12, 2022. The overnight MCLR rate has been raised from 6.60 per cent to 6.80 per cent, a 20 basis point increase. MCLR for one month has been raised from 7.05 per cent to 7.20 per cent, a 15 basis point increase. The 3 Month MCLR rate has been raised from 7.15 per cent to 7.25 per cent, a 10 basis point increase, and the 6 Month MCLR rate has been raised from 7.25 per cent to 7.35 per cent, a 10 basis point increase. The interest rate on the 1-year MCLR has been raised from 7.40 per cent to 7.50 per cent.
The bank has said in a BSE exchange filing that “We advise that the Bank has approved the revision in Marginal Cost of Funds Based Lending Rate (MCLR) w.e. f. 12th June 2022.”
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As a result of the hike of MCLR, existing borrowers of the bank will pay higher EMIs on outstanding loan amounts on Baroda Home Loan & Baroda Home Improvement Loan, Baroda Home Loan Advantage, Baroda CRE Home Loan, Baroda CRE Home Loan (Advantage), Baroda Top Up Loan, Baroda Mortgage Loan, Baroda Traders Gold Card Scheme, Baroda Ashray (Reverse Mortgage Loan), Baroda Education Loan, Baroda Auto Loan, Baroda Skill Loan Scheme, Baroda Advance Against Securities, Baroda Personal Loan, Baroda Loan To Pensioners and all other retail loans that are based on Marginal Cost of Funds Based Lending Rate (MCLR). As a result of the RBI’s decision to raise the repo rate by 50 basis points to 4.90 per cent from 4.40 per cent at the MPC meeting on June 8th, all leading banks have already begun raising interest rates on loan and deposit products, and borrowers of BoB will pay higher EMIs on retail loan products if they have taken any. Banks typically link MCLR-based housing loans to one-year MCLR rates, and if your home loan is linked to Bank of Baroda’s MCLR, the bank will raise interest rates on the reset clause or date specified on the loan agreement.
Meanwhile, the Bank of Maharashtra declared a 30 basis point increase in the marginal cost of funds based lending rate (MCLR) and a 50 basis point increase in the repo linked lending rate (RLLR) on Friday. The bank has also increased the repo linked lending rate from 7.20 per cent to 7.70 per cent effective June 10, 2022. The overnight MCLR has been hiked to 7.15 per cent, the one-month MCLR to 7.25 per cent, the three-month MCLR to 7.55 per cent, the six-month MCLR to 7.60 per cent, and the one-year MCLR to 7.70 per cent by the public sector bank. The new rates will go into effect on June 10, 2022. HDFC Bank recently increased its marginal cost of funds-based lending rate (MCLR) on all tenures by 35 basis points, effective June 7, 2022. According to the private lender’s website, the overnight MCLR is now 7.50 per cent, the one-month MCLR is 7.55 per cent, and the three-month and six-month MCLR are now 7.60 per cent and 7.70 per cent, one-year MCLR is 7.85 per cent, the two-year MCLR is 7.95 per cent, and the three-year MCLR is 8.05 per cent. After the RBI raised the repo rate, banks began raising interest rates linked to the MCLR or RLLR, resulting in higher equivalent monthly payments (EMI) on retail loan products.
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